Metro Atlanta offices are getting emptier and emptier as remote work continues to have an impact on the commercial real estate market.
National office vacancies have hit 19.6%, a new record high, according to Moody Analytics, which researches commercial real estate trends.
In metro Atlanta, that number stands at 18.8%, according to Brian Renshaw, a CPA with over 25 years of experience in the real estate and hospitality industries.
“2023 was really, really tough year. [For] 2024, there’s some optimism, but it’s going to take a while for the occupancy to come up and make these [offices] more of an attractive asset.”
Interest rates have dropped since the beginning of the year. Renshaw this could push more companies to invest in commercial space again.
“With construction activity being down, and as Atlanta continues to grow it has in the past. Occupancy will continue to increase because they’re going to need space to put the new companies with new employees,” said Renshaw.
Many companies have transitioned to a remote or hybrid work schedule in the wake of the COVID-19 pandemic. Since then, offices have struggled to return to 2019 occupancy rates.
“The buildings are not getting filled up as much. And it is because a lot of people are still doing remote work, especially here in Atlanta,” said Ava Anderson, a realtor in Metro Atlanta.
Some companies chose not to renew office space leases curbing its real estate expenses while others turned to other methods of bringing employees back to the workplace.
Companies like Atlanta-based UPS have changed their policy on remote work and issued a return-to-office mandate. Beginning in March, corporate employees must work from their office five days a week.
Tom Smith with Emory’s Goizuetta Business School says this has come with mixed reviews.
“if you’re looking at it from the perspective of an employee, you say, Oh, I’m just as productive at home. And I don’t have to spend an hour commuting both ways. And then parking costs and additional costs for gasoline, fuel, lunch,” said Smith.
Some hope that the available space could be transformed into residential areas which could help with Atlanta’s shortage of affordable homes.
Smith says that comes with its own challenges.
“The way that the offices have been laid out, they just don’t have the same amount of plumbing that you would need if you had a hotel or turned it into a condo, some other kind of rental unit if you will,” said Smith.